For most businesses, bridging the gap between innovation and sales (i.e. design and manufacturing) is a significant component of what they do. Some large companies may even view manufacturing as the “core” of the business. Manufacturing, however, is not an easy feat; it is capital intensive and requires significant experience and knowledge. It spans sourcing input, process management, machinery management, maintenance, quality control, and much more. Mastering the manufacturing of the products to be sold is a key to success, but for many small and midsize businesses and entrepreneurs, resources are best allocated elsewhere on the product cycle (either due to scarcity or value generation), such as research and development, innovation, design, or marketing and sale. Significant capital can be saved after all by not having a manufacturing facility with staff, machines, warehouse, etc. That is why many small and innovative companies look to outsource the manufacturing of their products to a specialized manufacturer. This article discusses how to find a manufacturer for your products.
The vast majority of innovators are what are called “couch innovators.” This simply means that they come up with ideas for products in a non-formal R&D setting. Their resources are generally inadequate to take the idea from concept to design, development and testing, manufacturing, and finally marketing and sale. Those innovators that master innovation and design generally start a small business to produce and sell the products. But with the stark advances in transport and communication, these innovative businesses no longer have to dedicate large portions of their resources to production. They can simply find a manufacturer for their products and focus on what they do best, innovation. The manufacturers, in-tern, can specialized and make use of economies of scale and geographical location, thus delivering better products at lower prices. But the two main questions that lurk in the entrepreneurs’ minds are 1) where to find the right manufacturer; 2) how to ensure quality?
The main starting point when looking for a manufacturer is, naturally, internal. The identification of major inputs that go into the finished product is always the first step. These inputs can be either materials critical to production (such as woven fabrics, petrochemicals, minerals, etc.) or skills or knowledge (such as specific programming skills, communication skills, fabrication skills), or both. Once these major required inputs are identified, research can focus on manufacturers in geographical locations where such inputs are readily available. Traditionally, this was achieved by communicating with local chambers of commerce, but in the new world, where information can easily be shared via the internet and where travel and communication are very accessible, direct research is certainly the preference. This can be done via search engines or professional networking websites such as Linkedin. E-Commerce website can also be very helpful, but the field remains underdeveloped and fraught with security issues. Still, strong manufacturer search contenders have emerged over the years, such as Alibaba and Afingo. Alibaba is the world’s largest e-commerce platform, connecting over 65 million users in 204 countries. Manufacturers for every type of product are listed, and users can simply send out emails with their specifications to look for interest. Afingo is similar but with a focus on the fashion industry. It also has some qualified vendors to make the research and qualification process easier for designers. Factory matching services are also available from Afingo.
Once a short-list has been identified, physical research starts, with site visits, quality inspection, and production, financial, and legal due diligence. And as always, specialized consultants are usually very helpful in this area, rendering unbiased and very knowledgeable advice to innovators who, at times, do not know the specific manufacturing market.
Once manufacturers are identified, businesses and entrepreneurs need to pay attention to ensuring that their desired quality is adhered to in the products manufactured, and that their intellectual property is adequately protected. These two major concerns are generally addressed through carefully drafting product manufacturing and licensing agreements.
In the end, the small businesses or entrepreneurs can get their products to the market more efficiently and cost effectively, while leaving room in their capital for future product development and growth.